Blizzard missed on DOTA becoming the most popular game in the world right under their noses. Just because they've made a lot of money doesn't mean they're infallible. I doubt a Progression server would be all that expensive to run, despite all the BS reasons they gave. The userbase on the 4 Elysium servers alone (each Elysium server holds about 10k concurrent players vs the 2k Blizzard vanilla did, so that's 20 original WOW servers) would be enough to sustain the 5 employees it would take to run the thing, especially since they could probably get away with hiring one of these private teams on an entry level salary and just having one old school Blizzard guy oversee the thing. And that's before factoring in the people who don't want to try this without it being "legal" or the current subscribers who'd try it out (which might be their actual concern).
Like, if you're going to play the Kotick card, there's plenty of ways to cash in on this. Release a Commemorative Warcraft pack with WC1-3 thrown in and slap a $30 price tag on it. Gouge another 10-15 with some artwork, "out of retirement" Metzen short stories and a head start. All these nostalgia whores are old now and have the money. Well, not all of them, but a broke 30 year old still has access to more money than a broke 15 year old.